Scania board rejects Volkswagen takeover bid

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The board of Swedish truck giant Scania has turned down a $9.2 billion takeover bid from Volkswagen telling members that their shares are worth more and not to sell up to the German manufacturer.

In a statement issued on Tuesday the independent committee of the Scania board of directors made its position clear. Volkswagen already owns 63 percent of share capital in the Swedish company and had offered 200 kronor ($31) per share for the remaining stock.

"Scania is a world-leader in its industry and the committee has strong faith in the business plan set out by the company. Our assessment is that the current offer does not reflect the long-term value of the company and a fair share of the synergies," said committee chair Åsa Thunman.

Scania's board has been dissecting the offer ever since, which has also been the subject of a probe by the Economic Crime Authority. The agency launched the investigation into suspected insider trading in the wake of the takeover bid.

Volkswagen first bought into Scania in 2000 and wanted to assume full control of the Swedish company. It estimated that it would make annual savings of €650 million through synergies as VW already owns German truck and bus outfit MAN.

However, any full takeover has been put on hold following the decision by the independent Scania board which believes its members' shares are more valuable.

"Based on the long-term prospects of Scania, its growth outlook, technological excellence and the synergy potential, the committee believes the offer does not reflect the long-term fundamental value of Scania and a fair share of the expected synergy potential and recommends to Scania’s shareholders not to tender their shares," the company said.

"Scania expects operating margins to improve over the coming years," the company concluded.

Scania, which has been in operation since 1891, presently employs 38,600 people in more than 100 countries. Its headquarters are in Södertälje, Stockholm county, where almost 10,000 of the workforce are based.